Sears 2011 Annual Report Download - page 76

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
Interest Income on Cash and Cash Equivalents
We recorded interest income of $4 million in both 2011 and 2010, and $5 million in 2009, primarily related
to interest earned on cash and cash equivalents. These cash and cash equivalents consist of highly liquid
investments with original maturities of three months or less at the date of purchase. Our invested cash may
include, from time to time, investments in, but not limited to, commercial paper, federal, state and municipal
government securities, floating-rate notes, repurchase agreements and money market funds. All invested cash
amounts are readily available to us.
Other Investment Income
Other investment income primarily includes income generated by (and sales of investments in) certain real
estate joint ventures and other equity investments in which we do not have a controlling interest. Investment
income from equity investments was $27 million, $17 million and $11 million in 2011, 2010 and 2009,
respectively. Other investment income also included a $4 million, $6 million and $9 million dividend received on
our cost method investment in Sears Mexico for 2011, 2010 and 2009, respectively.
NOTE 7—BENEFIT PLANS
We sponsor a number of pension and postretirement benefit plans. Expenses for retirement and savings-
related benefit plans were as follows:
millions 2011 2010 2009
Retirement/401(k) Savings Plans ................................... $ 11 $ 11 $ 13
Pension plans ................................................... 78 119 172
Postretirement benefits ........................................... 24 27 27
Total ......................................................... $113 $157 $212
Retirement Savings Plans
We sponsor Sears and Kmart 401(k) retirement savings plans for employees meeting service eligibility
requirements. Prior to 2009, we matched a portion of employee contributions made to the plans. The Company
announced during 2008 that it would suspend matching contributions on employee deferrals to 401(k) plans with
respect to eligible compensation earned for payroll periods that end after January 30, 2009.
Effective July 1, 2008, the Sears Canada defined pension plan was amended and a defined contribution
component was added. The defined benefit service accrual ceased and all plan members earn pensionable service
under the defined contribution component of the Sears Registered Retirement Plan.
Domestic Benefit Plans
Certain domestic full-time and part-time employees of Sears are eligible to participate in noncontributory
defined benefit plans after meeting age and service requirements. Substantially all full-time Canadian employees,
as well as some part-time employees, are eligible to participate in contributory defined benefit plans. Pension
benefits are based on length of service, compensation and, in certain plans, social security or other benefits.
Funding for the various plans is determined using various actuarial cost methods. Effective January 1, 2006, the
Sears domestic pension plan was frozen and domestic associates no longer earn additional benefits under the
plan.
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